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CRC: regulations on sale of allowances come into force
Practical Law UK Legal Update 9-519-6686 (Approx. 4 pages)
CRC: regulations on sale of allowances come into force
by PLC Environment
| Published on 29 May 2012 • UK |
The CRC Energy Efficiency Scheme (Allocation of Allowances for Payment) Regulations 2012 (SI 2012/1386) were made on 23 May 2012 and came into force on 24 May 2012.
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The CRC Energy Efficiency Scheme (Allocation of Allowances for Payment) Regulations 2012 (SI 2012/1386) were made on 23 May 2012 and came into force on 24 May 2012. An explanatory memorandum was published alongside the Regulations.
The Regulations, which explain how allowances will be sold in Phase 1 of the CRC Energy Efficiency Scheme (CRC), are in substantially the same form as the draft that was published in January 2012 and laid before Parliament.
The CRC Energy Efficiency Scheme (Allocation of Allowances for Payment) Regulations 2012 (SI 2012/1386) (Allowances Regulations) were made on 23 May 2012 and came into force on 24 May 2012. An explanatory memorandum was published alongside the Allowances Regulations.
A draft of the Allowances Regulations was published on 12 January 2012 and laid before Parliament on 26 March 2012 (see Legal update, CRC: government lays draft regulations on sale of allowances before Parliament).
The Allowances Regulations only cover Phase 1 (2010-14) of the CRC Energy Efficiency Scheme (CRC) and set out:
- Who will conduct allocations (sales) of allowances.
- When requests for allocation of allowances can be made.
- How payment for allowances can be made and when allowances will be issued.
- The consequences of:
- late or non-payment; and
- a transfer by the Environment Agency (EA) of excess allowances.
The Allowances Regulations are in substantially the same form as the version published in January 2012. There is only one change that is likely to have an impact on CRC participants. The Allowances Regulations now provide that where payment for the number of allowances that a participant requests is not made in full, the Environment Agency can allocate allowances up to the value for which payment has been received. Previously, the request for allowances would have been invalidated where full payment was not received by the payment deadline.
The first primary allocation period of Phase 1 of the CRC will run from 1 June 2012 until 31 July 2012.
A participant in the CRC must surrender allowances equal to its CRC emissions for the energy supplies in its 2011/12 annual report due to be submitted in July 2012. Although the deadline for the surrender of allowances specified in the CRC Energy Efficiency Scheme Order 2010 (SI 2010/768) is 31 July 2012, the EA has issued a Regulatory Position Statement that says participants will be treated as compliant with their obligation if they surrender allowances before 28 September 2012 (see Legal update, CRC: Environment Agency publishes guidance on 2012 sale of allowances).
The Environment Agency published:
- In April 2012, guidance on the process for ordering and paying for allowances, see Legal update, CRC: Environment Agency publishes guidance on 2012 sale of allowances.
- In May 2012, CRC Allowance Payment Etiquette.
For more information on the CRC in general, see:
- CRC Survival Kit.
Sources: